S-Corporations Tax Returns
S corporations have to file an annual tax return report on Form 1120-S of the Internal Revenue Service. The purpose is to provide the income statement of the firm as well as losses, profits, credits and dividends in the current fiscal year like a corporation.
The information includes a number of things such as information about the corporation, shareholders and foreign tax credit limitation. In it the information about the corporation includes:
- Corporation’s employer identification number.
- Corporation’s name, city, zip code and state.
- Internal Revenue Service Center where the corporation filed return.
- Corporation’s total number of shares.
The information about the shareholder includes the following necessary items:
- Current year Allocation Percentage.
- Shareholder’s name, city, state and zip code.
- Capital Gain or loss.
- Business an interest income.
- Gross Profit
Then the information about the licenses, interest about the corporations should be mentioned. Bad debts, maintenance, salaries and wages these are the items which we have to deduct in case of tax filings. This also include the employee benefits and other things such as pensions, profit sharing. S-Corp doesn’t pay taxes. Owners and shareholders (100 or fewer) report the company revenue as their own personal income. S-Corps have the benefit of corporations and enjoy the tax-exempt status of partnership.
Making of Election
For details about how to make an election then you should consult Form 2553, Election by a Small Business corporations, and the instructions for Form 2553.
When to File
Generally, we have to file the tax on 15th day of the 3rd month after the end of the fiscal year. If the due date is on some holiday, then the form can be filled the day after that holiday.
The owners of the firm can also submit the forms online which made it easier to submit the Form 1120-S, schedules, statements and attachments.
Where to File
There are different addresses for where you can file the tax form depending on the state in which you live. Like for instance, districts of Georgia, Maryland, Indiana, Michigan, New York etc. we can use the address Department of the Treasury Internal Revenue Service Center Kansas City, MO 64999-0013.
Who Must Sign?
The tax return should be signed by president, vice-president, treasurer, chief accounting officer or any other corporate officer.
A corporation should keep the record of its income according to the calendar year. It must file an election with the IRS to use a different fiscal year.
S-corporations need to return tax filings by the end of the accounting year so that there may not arise any sort of tax issue. Taxation is an important step in running business so the significance of tax returns cannot be ignored in any way.